Case-Shiller Home Price Index Increases in August
Submitted by
CalculatedRisk on Tue, 10/27/2009 - 5:30am (78 comments)
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I like the posts with pictures better.
well, that was a short one
It could be very enlightening to plot the Case-Shiller data by price class for various metro areas. If we understand the market correctly here in the commentariat, the low end will have been boosted more by the first-time tax credit; the high end will have seen some boost from the wholesale Fed backstop of FNM/FRE/FHA loans, but not as much.
Me too.... it seems Case-Shiller is slower every month to release the data
Prices were up compared to July, but they revised down some previous months ... so the percent from the peak is about the same as last month.
best wishes
I just can't wrap my head around those Vegas numbers. It's like sitting at the poker table with your college fund and losing it all.
CalculatedRisk wrote:
... it seems Case-Shiller is slower every month to release the data to the public.
There. Fixed that for ya.
More like your lunch money than college fund for many...
Another Dead Cat Bounce? Have prices been effected buy the $8K subsidy?
Wisdom Speaker, Case-Shiller has tiered prices,but it really isn't very useful (the tiers change based on the mix).
best to all
Just to repeat: the (>$400K) housing market is not strong in the metro-Boston area. There is enormous supply and the market is almost completely frozen (as of mid-September). Prices were flat this summer after a roughly 5% fall in the winter. Every agent I speak with expect prices in this segment to fall through this winter.
Take the C-S with a grain of salt: if the top end is not moving, you are seeing buyers--goosed with low mortgage rates and a tax credit--fighting for what few lower-end houses they can "afford". As the high-tier sellers get increasingly frustrated, you will see price declines trickle throughout the structure. I vote that this is a head fake.
For those bitching about the government taking action, it might be helpful to remember:
WSJ: Over 12% of all mortgages, and by extension some 8% of all households (including renters) are in arrears or foreclosure!
http://online.wsj.com/public/resources/documents/info-enlargePic07.html?project=imageShell07&bigImage=wsj_HousingMap091021.gif&h=648&w=779&title=WSJ.COM&thePubDate=20080826
,rads & apparatchicks,
The chimera ruse show must go on...
.......the high-end isn't increasing?........the low-end is?.........more foreclosures coming onto the market?........mods aren't working?........tax credits will be used on the lower end with recipients knowing they'll be audited?.........and the last graph is very alarming.
Didn't we already try to make ourselves rich by making homes unaffordable? That was the Greenspan doctrine, I believe.
Let me guess - the house prices fare better wrt to the scenarios than does employment?
Tells you what the bankers think is really important... reminds me of the Dilbert cartoon where the pointy headed boss tells the employees that the company said people were the firms greatest asset... except upon recollection that was wrong... money was the most important asset... people it turned out were ninth on the list, just after office supplies. I think the Fed & Treasury look at employment about the same way w/ CS #1... UE somewhere down the list. At least their policies indicate to me that is where their priorities lay.
CalculatedRisk wrote:
Rats! For an index that does such a good job of ensuring it publishes cross-comparable numbers, they sure botched that part... Methinks the smart thing to do might've been to have the tier limits set at the same time as the index was marked to 100, and then only adjust the tier limits based on the movement in the national average, or something equivalent that would track the national price trend (to avoid bracket creep) and yet provide some relative-price-movement information about the tiers.
someone tell that they have tried everything,now its time to do the right thing. and stop this crap!
A (naive?) question: On the first plot (the composite index), there is a period approximately between Jan-91 and Jan-98 where the index is nearly constant at a value of ~75. Is that some sort of "equilibrium value" for the index? I mean, in the absence of artificial interference by incentives, etc., do we expect the index to fall down to that level?
so the case shiller composite 20 index is back were it was n 2003... and now rising
here we go again?
double bubble-licious
CalculatedRisk wrote:
Well, it's useful if you are interested in the uniformity of the distribution.
(The tier cutoffs change, but the % in each bin do not iirc.)
The worst part is that if prices continue going up (which I strongly doubt), we will have the unfortunate situation of assets discounting an impossible stream of future cash flows. With 10% unemployment and rising taxes and interest rates, simple math indicates that the is no way that most families are going to be able to afford these homes. Rising house prices will not create employment given the surplus of housing; it will just siphon spending from other areas of the economy, frustrating the employment picture.
To dryfly's point: I can only assume that they hope that the investment banks create a new domestic bubble. That's it. There is no way that there are enough cash flows in the system to support this massive housing asset base.
Damned if you do, damned if you don't department:
If they can't keep up appearances by making it seem like the market has bottomed-All Is Well, the freefall continues unabated and there ain't no chance of relighting the roman candle of consumerism, but if they keep home prices high and unaffordable, who's gonna buy them?
All with the backdrop of heavy unemployment, and the fear of it happening to those gainfully employed.
JP wrote:
Yes. Unfortunately, plotting the tier cutoff points shows how the prices have changed at the boundaries between the tiers, but that has the information we want (relative change of small vs. large houses, say) mixed in with the sales mix changes.
What I would be very interested in seeing is an index based on repeat sales of homes of a well-defined character. (e.g. 3BR, 2BA, 1500-1700 s.f. vs. 4BR, 3BA, 2300-2500 s.f. vs. 5BR, 3+BA, 3000+ s.f.).
I guess I missed the part where price decines "always overshoot" the bottom.
Don't worry, unemployment, job losses to overseas, wage destruction, Taxes, will correct housing prices in the end. That is if they quit NINJA loans. Some how I don't think they have really raised standards yet.
gabyjan wrote 6:20 am previous thread
women didnt steal mens jobs,companies really looked at that bottom line.
yes, ive often been distracted by that bottom line
mock
not that bottom
YouTube -
They dook id dier?
I find it amusing that CR still cares about the stress tests for the banks. There is absolutely no way that those stress tests were anything but a confidence building sham.
Really, CR, do you honestly believe they were an honest attempt to determine the solvency of the banks?
Outlier wrote:
Not yet you haven't. Anybody who thinks 42 months of correction can cleanse 9 years of blowing bubbles had best be wearing a parachute.
In one world, homes are going up in value, while in another world (,rad yagij) is receiving 1,000 applications for a job that pays $1200* a month gross, and getting Ivy League grads, and far too qualified folks and such eager for a job, please!
1099 & no bennies
what is the FHA limit in your area? Id e surprised if you made the $729.5k grade, if you are slow above 400k.
CR, I'm not sure if you are aware of this but your website gets covered with errors after loading from my iPhone. It says:
user agent: *
Disallow: /
All down the left side of the page. This is only on my iPhone and just recently started happening, my desktop shows no errors. I Just thought you would like to know.
*Outlier wrote:
When you have a market economy based upon government subsidy rather than market economics, that'll happen....
Which is worse - bankers or terrorists wrote:
But not for long, I'll wager.
GDD9000
We can handle up to 565 FHA in metro-Boston. Another big problem specific to this region is our demographics. We have a heavy boomer population. The median age in a lot of these towns is over 50(!). There is a huge drop off in the population from 45-55 to 35-45 and then again to 25-35. This is likely the combination of young families escaping over the last 10 years and the baby bust. This is frustrating sales because the adult population is shrinking, and the there are more sellers (explicit or pent-up) than young family buyers.
As a resident of a $729,750 FHA limit area [ FHA Loan Limits for CALIFORNIA
] I recommend "effective demand's" blog: Effective Demand for tracking a typical high cost market behavior.
When I was 10, I could blow a bubble within a bubble-with bubble-gum, but I had nothing, compared to the housing bubble.
Looks like $525K FHA for my area, not $565.
Am I lucky or what, living in Az I can still afford a house.
josap wrote:
A "house" yes but a "home?" That can be another matter entirely.
josap wrote:
Houses will be free in AZ soon---
It is water you will be searching for.
Jeremy Grantham Q3 Letter - does a good job of skewering both American leadership and even the people... spot on unfortunately.
Fund My Mutual Fund: Jeremy Grantham GMO Q3 2009 Letter - October 2009
Some of the REOs should be free, they are totally trashed.
The investors have cleaned up the very low end stuff and FTHB picked up lower end properties as well. We have seen some REO sales of $200,000. houses that used to be $400,000. Not much else is moving.
The local (virginia) RE agent that I trust sez the market is dominated by foreclosures. Nothing else is moving but the lenders are trickling out REOs and getting multiple bids with the 'winner' getting the house higher than list (original $400-500K houses selling for $200K). Not my idea of a healthy market even if prices have nudged higher.
dryfly wrote:
I must admit that seeing Detroit in the Bronze position of "Peak-to-Now" is scary knowing what has been going on in Detroit for decades. What do you call it when your peak is worse than other people's current busts?
does anyone actually know anyone who's purchased a four-plex with a $1.4M FHA loan? seems silly to be subsidizing live-in landlords...
*token bull wrote:
You just described Europe, Russia, and Japan.
I just can't get over the way these money (mis)management firms keep recycling incompetent idiots. Seriously, is a former head of Merrill Lynch supposed to inspire CONfidence? As if? I think I'll stick to my own advice and management.
Yahoo! 404 - Page Not Found
A little late, but not past the statute of limitations for Geithner. [Eric] Holder? Holder?
New York Fed’s Secret Choice to Pay for Swaps Hits Taxpayers
(You'd never guess which pigman is running for Mayor for an improper third term)
Juvenal Delinquent wrote:
Clarification: received that many applications in July 2008. Granted, some applications were for people who just wanted to keep their UE benefits, but we easily had 250 resumes out of that package that would be good candidates if it showed up by itself.
.
Note: We have only had 2 cold calls and 4 blind emails this year of people who are looking for work and submitting to places in hopes that one dart hits somewhere on the board.
Which is worse - bankers or terrorists wrote:
I think personal savings rates in those regions are/were higher so they may have a little more flexibility with regard to housing prices. In the States, I suspect that a lot of boomers were expecting to retire off of the eternal growing home equity...
Blackhalo wrote:
Don't forget nationalized health care and rather nice retirement benefits (I'm looking at you, Germany
)
yogi: What's the source for that?
I have high hopes for Barofsky's audit of AIG counterparties....
Bleach your teeth, hang out in a tanning salon and you too can be rich, successful and untouchable, sell junk to the desperate and unsuspecting/unsophisticated then you too can be like Angelo Mozilo and friends. Air Jordan of the RE markets and hedge funds! Make those FHA loans just the way you did before---no problemo.
I'll never forget a congressional hearing on the housing market (I think it was last year) when Henry Waxman used Mozilo as an example of success and entrepreneurial spirit that congress must be sure not to discourage. That day I broke some china in the house.
*Blackhalo wrote:
Well we sure solved that problem of boomers retiring, didn't we?
The situation is varied, but many of the countries mentioned (I'm thinking Eastern Europe, Russia) don't have as well-developed mortgage markets as the US does and require more equity consuming said savings, etc.
Then again I'm not sure "well-developed" is the word. Cancer that metastases quickly is also well-developed...
If everybody had a home loan
Across the U.S.A.
Then everybody’d be Serf”n
Like Californi-a
You’d see em’ wearing their hairnets
Fast food uniforms too
A few missed loan payments & it’s over
Serf”n U.S.A.
You’d catch em’ Serf”n, living out of their car
Assistance from the county helpline
Santa Cruz and the No Cals
Inland Empire’s not doing so fine
All over Manhattan
Real estate’s down in every way
Everybodys gone Serf’n
Serf’n U.S.A.
We'll all be planning that route
We're gonna take real soon
We’re waxing down the economy
We can’t anticipate a swoon
We’ll all be foreclosed on by next summer
We're on Serfari to stay
Tell King george II we're Serf’n
Serf’n U.S.A.
YouTube - The Beach Boys - Surfin' USA [Live]
WSJ - TARP should not be extended.
...
"TARP was then redirected well beyond the financial system into $80 billion in "investments" for auto companies. These may never be repaid but served as a lever to abuse creditors and favor auto unions. TARP also bought preferred stock in struggling insurers Lincoln and Hartford, though insurance companies are not subject to bank runs and pose no "systemic risk." They erode slowly as customers stop renewing policies.
TARP also became another fund for Congress to pay off the already heavily subsidized housing industry by financing home mortgage modifications. Not one cent of the $50 billion in TARP funds earmarked to modify home mortgages will be returned to the Treasury, says the Congressional Budget Office."
...
"Treasury and the Fed would prefer to keep TARP as insurance in case the recovery falters and the banking system hits the skids again. But the more transparent way to address this risk is by buttressing the FDIC fund that insures bank deposits and resolves failing banks. The political class has twisted TARP into a fund to finance its pet programs and constituents, and the faster it fades away, the better for taxpayers and the financial system."
TARP Should Not Be Extended - WSJ.com
Sweeet! The Denver market has now risen 8.2% from its 2009 bottom. Even more than the 7% bounce I was expecting, and with September and October already in the bag but yet to be accounted for, it is sure to see +9% by through September, and even possibly an extraordinary +10% through October! I appear to have survived those 'falling knife' wounds.
black dog wrote:
They do need to keep TARP, the recovery will falter. The banks will have further large loses in RRE and CRE.
Thind about how many of our systems are simply out of money,
Reading the recently TARP report. SIGTARP recommendations not accepted by Treasury:
*Treasury and the Federal Reserve should provide to SIGTARP, for public disclosure, the identify the borrowers who surrender collateral in TALF.
Wow; a number of recommendations on MHA that haven't been implemented. A number of anti-fraud measures in the PPIF.
TARP is going to be extended. In fact, I believe Congress has authority to block the TARP law from being expanded. I don't know why they won't do that. Oh wait, too busy furthering the agenda instead of minding the business. Republican Senator Gregg had harsh words about TARP. He basically said the program was set up to avoid the catastrophic failure of the economy ,and we did that. Some of the ways people are asking to use TARP money is beyond Congressional intent.
,rad yagij,
Thanks for adding emphasis of exodus of employment...
Hmmmm.... declining consumer confidence.
Could be a recession coming.
Take away the punch bowl and you just set up the scenario for another stimpack. Now wouldn't it be just too cute if the Fed just 'happened " to trot out it's reverse repo. at the same time.....nahhh that wouldn't happen too obvious.
Ciao
MS
Hmmmm.... declining consumer confidence.
Could be very little under the tree for Christmas.
josap-
There is no recovery....you can't fail at something that doesn't exist. Which is a great analogy to why we have these current problems.....say it enough times and they just don't exist.
Ciao
MS
ac wrote:
Yup, now that the shock of a bursting bubble has reverberated we are about to experience a much delayed economic recession from these current levels. Our perceptions were distorted by the bubble into thinking where we are now is "down" when it is merely post-bubble. Now the recession begins.
MS wrote:
Should we call it the "Flying Spaghetti Monster" recovery?
Do you tango Argentineconomix?
according to John Jansen, more forex intervention, this time from Hong Kong to stem the appreciation of the HK dollar against the USD.
The New York Fed is at 212-720-6130 hit 0.
Ask them why Geithner secretly told AIG to pay 100 cents to his crony banks.
Come on you lazy commentariat.....
Basel Too wrote:
Looking for more of these "interventions" as the US continues to destroy its CAD and currency
Demographic shift is the real underlying issue underneath the bubble blowing obfuscation. You have to sell to someone younger eventually, no matter what you are selling.
When you bankrupt your children you screw yourself.
token bull wrote:
And people don't move to Boston from other parts of the country 'for the weather'... like say SD or Naples FL.
yagij wrote:
Detroit.
dryfly wrote:
Det-riot.
There. Fixed that for ya.
If you look at the seasonally adjusted national value, the Case-Shiller index was at 74 in the first quarter of 1991. That would correspond with the low during the recession of the early 1990s. Today, in inflation unadjusted numbers, the seasonally adjusted value is 132.02. Adjust that for inflation (CPI-U), and the value today is 13.0% above that in the first quarter of 1991. Not too bad, but take the Case-Shiller 10 index and adjust it for inflation and the value today (August 2009) is 27.9% above the value at the bottom (April 2001).
Hard to see how the Case-Shiller index doesn't continue to fall over the next several years.